On Saturday, the National Hockey League and NHL Players’ Association announced the salary cap for the 2024-25 season would be $88 million, up from $83.5 million, with a minimum payroll of $65 million. It marks the biggest cap increase since the 2018-19 season, and the first bump of more than $1 million since the 2019-20 campaign.
The NHL’s salary cap has barely budged the past four years, as players owed a “debt” to make up for revenue shortfalls triggered by the COVID-19 pandemic, when games were canceled and arenas operated at limited capacities. The shortfall was estimated at $1.5 billion.
The cap is determined by league revenue, and the NHL CBA requires owners and players to evenly split hockey related revenue (HRR). Speculation swirled that the cap might not resume regular increases until 2026.
“Revenues grew much faster than anybody anticipated, and so the escrow debt was paid off much faster than anybody anticipated,” Allan Walsh, co-head of Octagon Hockey, said in a phone interview.
HRR will top $6 billion this season, fueled by strong attendance and double-digit gains in sponsorship revenue. Walsh expects that growth to continue, pushing the cap to $92 million for the 2025-26 season, and then $97 million and $101 million, which will drive significant growth in player salaries.
“I predict that it will continue to go up,” NHL commissioner Gary Bettman told the media on Saturday. “Obviously, with the number of years we had with flat or modest increases, it was necessary to recapture how much was overpaid and how much the escrow built up during COVID, but I believe we’re going to continue to see robust growth in the cap.”
The NHL cap is up but has badly lagged the rise of the salary cap in other sports. The NHL salary cap was higher than the NBA during the 2012-13 season at $60 million versus $58 million. But once the NBA’s $24 billion TV deal kicked in, the league’s cap soared. It will be $140 million next season, up 141% since the 2012-13 season; the NHL gain is 47%. The increase for the NFL cap is 111%.
In July 2020, the NHL and NHLPA reached a four-year CBA extension to run through the 2025-26 season. It set escrow levels at 20% during the 2020-21 season to help recoup the debt owed to owners. Escrow was 17% during the 2021-22 season, 10% the next season, and now 6% for the final three seasons of the CBA.
Historically, most of the escrow has gone back to the teams to help ensure a 50-50 split of HRR, but the business of the NHL has been so strong during the 2023-24 season that players could see most or even the entire escrow refunded when final accounting is done.
For the 2005-06 season, players received an extra 4.6% in their paychecks, due to surplus revenue, and a slightly higher rebate during the 2007-08 season, but escrow has typically been lost money for the current crop of NHLers.